Allowing the petition the Court held that on dates of initiation of proceedings and creation of the mortgage, to demonstrate that the mortgage was created after initiation of the proceeding. The Tax Recovery Officer has power under rule 83 in the Second Schedule empowering him to take evidence exercising power of a civil court. But in the exercise of the power, there must be laid evidence to substantiate the declaration of the mortgage being void. So far as rule 86 was concerned, the Department had not argued that the order was not one, which was conclusive in declaring the mortgage void. No finding that the date of initiation of the proceeding was before the date of creation of the mortgage could be located in the order. The order was bad for being vague.
Bajaj Finance Ltd. v. TRO [2024] 461 ITR 397 (Orissa)(HC)
S. 281 : Certain transfers to be void-Priority of debt-Secured creditor-Mortgage of land and construction-The omission of dates of proceedings and mortgage of property in order to demonstrate proceedings initiated before mortgage of property-Finding on date of initiation of proceeding prior to date of creation of mortgage not found in order-Order vague-Order set aside. [ITR. 83 Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002-Recovery of Debts and Bankruptcy Act, 1993, Art. 226]